After a week of highs and lows for the pound, it seems to have clawed back some strength amid the ongoing Brexit trade talks. Though the GBP is in a higher position than it was, experts are pessimistic about its future.
The pound is currently trading at a rate of 1.1151 against the euro according to Bloomberg at the time of writing.
It’s a modest boost of around 0.08 overnight.
However, this could be set to change if a trade deal which is beneficial to both the UK and EU is not agreed upon.
Speaking exclusively to Express.co.uk, Michael Brown currency expert at Caxton FX shared his insights.
“Sterling ticked higher against the common currency in a choppy trading session yesterday, though gains may be short-lived given reports of ‘pessimism’ surrounding the post-Brexit trade talks and scant expectations of a breakthrough this week,” explained the expert.
“The conclusion of talks today, and subsequent media briefings from both sides, will be the primary driver of GBP/EUR as the week draws to a close, with the lack of a breakthrough potentially pressuring the pairing.”
UK and EU leaders have been at loggerheads this week trying to secure a deal, drawing major focus to fisheries.
The EU’s chief negotiator Michael Barnier has said a deal would need to be secured by October for it to be ratified by the end of the transition period on December 31.
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An EU diplomat said: “The state aid part of the level playing field and fisheries remain the main hurdles.
“If this moves, everything else will fall into place.”
“This round should not bring major breakthroughs: eyes are on the last one in September.”
However, the ongoing Brexit discussions are not the only element impacting the exchange rate.
The ongoing coronavirus pandemic has also had a major economic impact.
George Vessey, UK current expert at Western Union Business said: “The UK economy is suffering more so than its European neighbours as a result of the global pandemic, and this fact, coupled with the large current account deficit and Brexit risks, are likely to weigh heavy on the pound.”
Despite the uncertainty, though, many Britons are looking to change travel money in the coming weeks ahead of holidays.
One way to lock in good rates is with a prepaid travel money card.
“When it comes to getting the most out of your hard-earned holiday money, exchange rates make all the difference,” Ian Strafford-Taylor, CEO of FairFX told Express.co.uk.
“Using a prepaid card gives you more control over exchange rates, whether you’re topping up before you travel or while you’re away, protecting you from unstable markets and further fluctuations.”
He added:“If you buy at the wrong time or from the wrong place, you could miss out on hundreds of pounds.”
“With Coronavirus and a looming Brexit deadline, there is a lot of uncertainty ahead, which means the pound is vulnerable to further fluctuations.”
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